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BMA discusses using One Kingsport funds for Midtown redevelopment

Matthew Lane • Jul 10, 2016 at 12:30 PM

KINGSPORT - Kingsport has agreed to pitch in $3 million towards the redevelopment of the Midtown neighborhood, where the key element is replacing Lee Apartments with 51 new duplexes and town houses within the next 30 months.

The $3 million could be paid any number of ways, from a variety of sources. It could be a lump sum or provided over a number of years. Though the decision has not formally been made, the initial thinking among city officials is to use One Kingsport funds – approximately $225,000 a year for 20 years – to cover the $3 million.

“It's really not a One Kingsport project,” Alderwoman Colette George said during a Board of Mayor and Aldermen meeting last week.

During the One Kingsport process, the redevelopment of the Midtown neighborhood was discussed, but the project never made it on the “big ideas” list, thus it was not recommended by the prioritization team earlier this year.

Alderman Darrell Duncan, who chaired the One Kingsport housing work group, explained the reason why the project was not on the list. Duncan said the work group felt it did not have the expertise to discuss the topic and basically turned it over to the KHRA.

Development Service Director Lynn Tully further explained that when the One Kingsport process was taking place, the KHRA had applied for the 9 percent tax credits.

“We really thought it would happen. This opportunity was not on the table because it was already being handled,” she said.

Mayor John Clark said the One Kingsport concept is to improve the quality of life for all citizens.

“This board needs to decide if it wants the flexibility to take advantage of an opportunity that's surfaced after the fact and whether it fits the One Kingsport concept,” Clark said.

Four years ago, the Kingsport Housing and Redevelopment Authority began planning for the transformation of the Midtown neighborhood, from roughly Myrtle to Dale and Tennessee to Poplar. Last year, the KHRA applied for $11 million in federal housing tax credits to go towards the project, but earlier this year learned it did not make the cut for those credits.

The KHRA then went back, revised the plan and are now seeking non-competitive tax credits. The KHRA also has a funding plan in place for the entire project, which includes $1 million of its own money, along with loans and state and federal funds.

The last piece of the puzzle is the $3 million from the city and the funding plan submitted to the federal government by an Aug. 1 deadline.

During a BMA meeting on Tuesday, the board voted 7 to 0 to fund the $3 million. However, the funding source was not set in stone.

Vice-Mayor Mike McIntire said on Tuesday there is ample money coming into the city to take care of the $225,000 a year commitment.

“We wouldn't be taking money away from anything else to do this,” McIntire said.

George said she doesn't want the BMA to increase the garbage fee in a couple years to cover projects not on the One Kingsport list.

“In past, we've found funding. Are we going to turn around and say we're going to have to use funding for other things?” George said. “Is One Kingsport funds going to be our “go to” fund for every great idea or are we going to look for the funds elsewhere like we've done in the past?”

Ultimately, the BMA has to decide where the funding comes from, Clark said.

“I've always thought we as a board would have the final say if we agree to those projects. This falls in that area,” Clark said. “It's up to the board and city management to figure out how to fund this.”

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